If you own cryptocurrency and are looking to spend it, send it to your crypto wallet, or convert it to a different exchange, you’ll first need to know that a transaction is verified on the blockchain. A blockchain exists as a distributed digital ledger that contains every cryptocurrency transaction. Blockchains are what make cryptocurrencies safe and trustworthy as they make every transaction available for the public to see. every cryptocurrency transaction must be confirmed on the blockchain before any crypto changes hands.
what does bitcoin transaction confirmation do?
A bitcoin transaction or any cryptocurrency transaction must be confirmed on a blockchain to verify that the transaction is legitimate. a confirmed transaction means that the transaction has been included in a block and thus has been included in the blockchain. that means the transaction has now been officially recorded and verified, the payment can now be processed and can no longer be reversed.
Reading: How to track bitcoin
how does bitcoin transaction confirmation work?
Unless you are what is known as a blockchain “miner”, there is not much you can do to verify a transaction. instead, you should leave it to the professionals.
Every time you make a bitcoin transaction, you will be provided with a “private key” to make the request. only you have access to this key, and the key is automatically generated and unique for each transaction. will use the private key to request the transaction, and the transaction request will be broadcast on the bitcoin network.
See also: What is dollar-cost averaging (DCA) and how does it work?
miners will then take your request, along with many others, and privately extract the encrypted request to “resolve” it. We won’t go into the mining process here as it is quite complex, but mining is an essential process for bitcoin transaction verification.
Once a miner has solved it, the miner adds it to their own version of the blockchain ledger. then other miners and other users known as nodes will verify that the first miner’s proposal is correct and valid, and the new block containing all those transactions will be added to the public blockchain. by being added as part of a block to the blockchain, your transaction is now confirmed.
Each block in the blockchain is mathematically connected to the previous block. after the block containing your transaction is added to the chain, any block that follows acts as an additional confirmation. therefore, each block that follows the first confirmation is another confirmation that your transaction is legitimate.
what is the average bitcoin confirmation time?
bitcoin blocks, which contain all the most recent transactions, are added to the block chain every 10 minutes. that means that, in theory, your transaction will receive its first confirmation within 10 minutes of submitting the request. Unless you are sending more than $1,000,000 worth of cryptocurrency, it is unlikely that you will need more than 6 confirmations for the transaction to be processed, so it should generally not take more than an hour for the transaction to be confirmed by complete.
how many confirmations does a bitcoin transaction need?
The number of confirmations required for a crypto transaction to be processed will depend on the exchange, and will sometimes depend on the amount being transferred. Some exchanges will process a transaction after only one confirmation, many require three confirmations, while some may require as many as six. many bitcoin wallets will not process transactions until they have been confirmed at least three times.
See also: Robinhood Announces Non-Custodial Wallet — Under the Hood
In most cases, one confirmation is considered sufficient for small transactions under $1,000, three confirmations is better for transactions up to $1,000, and six confirmations is standard for transactions up to $1,000,000.
how to track bitcoin transactions
It’s easy to check the status of your bitcoin transaction and see if and how many times it has been confirmed. When you send bitcoins, in addition to the private key, you also receive a bitcoin transaction ID (txid), which you can use to track the transaction.
The bitcoin block chain can be accessed at https://blockchain.info/. here, you will be able to enter your bitcoin txid, or your exchange or wallet address, to track your transactions. you’ll see a summary of information about the transaction, including the number of confirmations it has.
You will also be able to see the fee you paid for the transaction. each transaction comes with a fee that goes towards the rewards miners receive for solving equations.
we can help
gocardless helps you automate payment collection, reducing the amount of administrative tasks your team has to deal with when searching for invoices. Find out how gocardless can help you with ad hoc payments or recurring payments.
See also: iTrustCapital vs BitcoinIRA: Which is the Better Crypto IRA?
